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The Korean Semiconductor Boom Boomerangs

October 04, 1992

Developments To Watch

THE KOREAN SEMICONDUCTOR BOOM BOOMERANGS

For U.S. industry, there's a sense of deja vu in Korea's rapid rise in the semiconductor business. Spurred by massive government subsidies, Korea's main chipmakers -- Samsung, Goldstar, and Hyundai -- have quadrupled capital spending since 1986, to an estimated $ 1.1 billion last year, according to market watcher Dataquest Inc. Samsung Electronics Co. accounted for almost half that spending and now is the No. 2 supplier worldwide of dynamic random-access memory (DRAM) chips. Only Japan's Toshiba Corp. makes more.

At first, the U.S. and Europe cheered on the Koreans, hoping they would break Japan's stranglehold on DRAM supplies. But the Koreans may have copied Japanese tactics too well. In late September, the European Commission charged the Korean trio with dumping and socked their DRAMs with a punitive 10.1% tariff. It's a slap on the wrist -- barely half of the smallest dumping margin. To Dataquest, that shows the EC doesn't want to risk derailing the Korean challenge to Japan. Meanwhile, the U.S. Commerce Dept. is expected to decide soon whether to impose its own antidumping tariff.EDITED BY NAOMI FREUNDLICH